Detailed narrative
A transformational year: Kito Crosby close and power-chain divestiture
FY26 completed two strategic transactions in the fourth quarter: the Kito Crosby acquisition closed February 3, 2026 and the legacy U.S. power chain hoist and chain operations were divested March 4, 2026. Q4 results therefore reflect two months of Kito Crosby and exclude the divested business for March.
Kito Crosby added $188 million of revenue in FY26 (two months), while the divestiture reduced FY26 sales by $14 million. Management framed the combination as creating a scaled global provider of 'intelligent motion solutions' with more than 7,000 team members, and a Day-1 unified organizational structure.
Fourth-quarter GAAP results and one-time items
Q4 GAAP gross profit was $103 million (+29%), including a $67 million contribution from Kito Crosby, partially offset by a $37 million noncash acquisition-related inventory step-up (to be fully amortized by the end of the current quarter) and a $7 million divestiture impact.
GAAP RSG&A of $134 million rose 98% on $32 million of incremental deal costs, $31 million from Kito Crosby and $2 million higher stock comp. Below the line, a $200 million noncash goodwill impairment (sustained stock-price decline), $24 million of debt-extinguishment costs and $27 million of higher interest expense were partially offset by a $103 million gain on the divestiture sale, producing a $238 million GAAP net loss ($5.78 loss per share for the quarter, $7.40 for the year).
Gross margin bridge and the Q4 anomaly
Adjusted gross margin of 32.7% was pressured by multiple factors management largely called transient📎: the acquisition was accretive by ~200 bps, but the divestiture was ~50 bps dilutive, tariffs ~50 bps dilutive, and unfavorable Americas mix ~75 bps. A sizable EMEA drag came from delayed shipments tied to a large customer reassessing its construction schedule.
The Americas mix hit was a 'good news, bad news' story: improved operations let CMCO ship past-due backlog priced before tariff/material inflation, raising the share of lower-margin equipment relative to high-margin parts. Sales-force distraction from the divestiture also weighed. Management expects gross margins to normalize going forward⏳.
Platform performance: linear motion, automation and lifting
Linear motion grew 25% and automation grew 8% for the year, reflecting demand recovery and improved operational performance in linear motion following the successful transition of production to Monterrey under the footprint-simplification strategy. Lifting delivered solid growth supported by the acquisition, favorable foreign exchange and tariff-related price increases. Strength was concentrated in short-cycle demand and in the Americas, while EMEA demand was more challenged.
Orders, backlog and early FY27 demand
FY26 orders grew 20% (largely acquisition-driven), and Q4 orders rose 68%, complemented by modest legacy CMCO order growth led by automation and lifting. Order activity was affected by EMEA macro pressures🌐 and temporary U.S. sales-force distractions from the divestiture. CMCO entered FY27 with a $520 million backlog ($320 million legacy CMCO plus $200 million Kito Crosby).
Encouragingly, orders in the first two months of FY27 were up mid-single digits, supported by a strong pipeline and robust quotation activity, with U.S. demand signals described as encouraging.
Integration and synergy realization
Management reported a strong integration start: a Day-1 unified organizational structure and early synergy wins from realigning the organization plus third-party spend savings including insurance consolidation and contract harmonization. CMCO reiterated its $70 million annualized net cost synergy target in year 3 and a $14 million in-year synergy contribution in FY27, expressing confidence it could potentially exceed the commitment and see accelerated realization through the year.
Increased procurement scale from more than doubling company size is being used to leverage combined vendor spend.
FY27 guidance, capital allocation and deleveraging
FY27 guidance calls for net sales of $2.05B-$2.12B, adjusted EBITDA of $390M-$410M (incl. $14M synergies) and adjusted EPS of $1.70-$1.90, with ~52M adjusted diluted shares. Pro forma organic growth of 1%-4% assumes no revenue synergies (framed as upside) and pricing a little over half of growth.
Debt reduction is the top capital-allocation priority; management targets 4x or inside 4x net leverage within two years from 5.1x, aided by working-capital improvement and free cash flow. The business is expected to be back-half weighted⚖️.
EMEA and Middle East headwinds
EMEA demand remained challenged by worsening geopolitical conditions and slowing order conversion despite a healthy pipeline, partly offset by FX tailwinds; large-project decision-making has been slower to award. CMCO's direct business into the Middle East approximates $50 million, and management estimated roughly a $20-$24 million run-rate impact if disruption tied to the Iran conflict continues at current rates, citing delivery challenges on part of that exposure.
Management expressed confidence in passing through any inflation-driven input-cost increases.